Solicitor denies mixing up nature of €25m Lynch loan
Email sent by law firm employee just hours before family signed up to transaction
A SOLICITOR denied he "mixed up" concepts over the nature of a €25m property development loan to businessman Philip Lynch, his family and property developer Gerry Conlan, the Commercial Court heard yesterday.
Imdaad Sulaiman, a solicitor with LK Shields at the time the loan was given, denied he mixed up concepts of security and recourse in an email stating AIB "no longer require any legal recourse" against the One51 boss, Mr Conlan, "and the Lynch children" for the loan to buy development lands in Waterford.
The court heard the email, written by Mr Sulaiman, was copied to Mr Lynch's personal assistant Robert Burns just hours before the Lynch family signed up to the €25m loan on February 8, 2007.
Mr Sulaiman was being cross-examined in the continuing action before Mr Justice Michael Peart by the Lynch family against AIB and two law firms -- LK Shields and Matheson Ormsby Prentice (MOP) -- aimed at preventing the bank pursuing them to repay the €25m loan.
The family claim the loan was a non-recourse facility secured on the Waterford lands with the bank entitled to take the land if they could not meet their loan repayments.
AIB denies this claim and insists the loan involves full recourse to the family. It is counterclaiming for €25m orders against them and, in separate proceedings, is also claiming a €25m judgment against Mr Conlan.
The family have alleged negligence by both law firms and are claiming indemnities from them concerning the claims by AIB. Both firms deny the claims against them.
Mr Sulaiman said the information in his email sent on the morning of February 8, 2007, was based on information provided to him by another solicitor, Ronan McLoughlin, in the firm of MOP.
He was "simply passing the information on" and had no reason to doubt it, he said.
He agreed the email was sent before he received the final terms of the AIB loan and agreed he had not read that final loan facility letter in its entirety.
Michael Cush, counsel for MOP, asked did Mr Sulaiman not appreciate the final terms of the loan involved a full recourse facility to all the borrowers.
Mr Sulaiman said he did not appreciate that because he understood from his conversation with Mr McLoughlin it was to be a non-recourse loan.
He agreed he was aware LK Shields was making the case in this action that the loan was clearly a full-recourse facility and was contending the Lynch family should have appreciated that and did appreciate that.
Mr Cush suggested it must follow Mr Sulaiman ought to have understood it was a full-recourse facility.
Mr Sulaiman disagreed and repeated he acted on information from MOP which, he said, was acting on behalf of the Lynch family in connection with the financing and conveyancing of the transaction.
He denied suggestions by Mr Cush he had mixed up the concepts of recourse and security both in the email and in his evidence to the court.
Mr Sulaiman also denied he was responsible for a series of failures in dealing with matters on February 7 and 8, 2007, relating to the Waterford transaction.
The case continues.